Reuters

(Reuters)

Republicans Set 2012 Budget Battle With Obama

Politics Reuters

Republicans in the House of Representatives united on Friday behind a 2012 budget plan that would slash trillions of dollars in government spending while cutting taxes, setting the stage for acrimonious debt and deficit negotiations with President Barack Obama.

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By a vote of 235-193, the House passed the budget outline written by House Budget Committee Chairman Paul Ryan for fiscal 2012, which begins on October 1. No Democrats supported the measure and only four of 241 Republicans opposed their party's budget.

The vote caps a week in which Obama belatedly entered the deficit debate with a partisan speech that hammered the Republican proposal, and Congress finally agreed to fund the federal government for the rest of this fiscal year after down-to-the-wire haggling between Republicans and Democrats.

While Obama and his fellow Democrats have vowed to block major elements of the Ryan 2012 budget -- notably much higher healthcare costs down the road for the elderly -- the House budget outline will nonetheless be important going forward.

It will help shape the 12 spending bills Republicans will write in coming weeks, likely opening new tensions with the White House. If left unresolved, those tensions could boil over later this year and bring the federal government to the brink of a shutdown, echoing a battle that was just fought over spending for this year.

More immediately, it reinforces Republican demands for more government spending cuts as their price for supporting raising the United States' debt ceiling in the next few weeks.

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Obama acknowledged on Friday that a compromise on spending cuts would be needed to get the necessary support in Congress to raise the U.S. debt ceiling, while warning that the world could plunge into a new recession if the United States were to default on its debt.

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